What are NFT smart contracts? (+ 3 jaw-dropping examples)

Posted on March 18, 2022December 19, 2022 by Aaron Radcliffe

NFT-awareness is growing exponentially. Especially with its rise and fall!

But amidst all of the growing awareness, most people only know about NFTs in their most basic form – as a piece of digital art or a rare digital asset.

Even with the recent fall in value of NFTs, more and more celebrities are starting projects, NFT commercials appeared during the Super Bowl, and now over two-thirds of freelancers on Fiverr are marketing their own NFT services.

And yet, the value of NFTs can be so much more than that.

Sure, a Crypto Punk selling for 23 million USD is cool and all, but this is only scraping the surface of what blockchain technology is capable of.

Enter; NFT smart contracts & royalties.

Smart contracts are the REAL game-changing value of NFTs because they allow businesses, creators, and artists to monetize their brand perpetually, while also empowering their customers and fans with the financial rewards of digital ownership.

In this article, we’ll give you a behind-the-scenes look at how NFT smart contracts work, so you can see for yourself why they are so revolutionary.

You’ll also see a few real-life examples of people who are innovating NFT smart contracts and changing the way creators, businesses, and their customers can generate income.

Royalties IRL (in real life)

Royalties are nothing new. The concept has existed in its most basic form for as long as money has existed.

But technology has helped creators and businesses achieve royalty at scale.

royalties then vs now — *Larry David and Jerry Seinfeld made 400 million EACH from royalties on ‘Seinfeld’*

It started with television, and then with the advent of the internet, it developed into a whole new world – streaming. Now artists can put their music on Spotify or Apple and earn money (a royalty) every time someone streams one of their songs.

Royalties are also collected in other industries including sales of books, patents, concerts, and even natural resources.

But while royalties exist in the real world, there are limits to their use cases.

For instance, if an artist paints a picture and sells it for $100 to a buyer… it’s over. The artist has given up ownership of the picture, and if the buyer of the picture resells it at a later point in time, the original artist might never see a piece of that action.

This is where NFTs are changing the game.

Royalties in NFTs

NFTs give artists, creators, and businesses the ability to collect royalties perpetually.

Let’s use the same scenario as before. If the artist were to sell the picture as an NFT for $100 and the buyer resold the picture at a later point in time, the original artist could receive a royalty on that sale.

And not only on that sale – ALL future sales.

Every time the asset is resold, the royalties are automatically taken from the sale price and deposited into the crypto wallet of the original creator.

This is possible because of smart contracts.

What is an NFT smart contract?

NFTs exist because of crypto technology, and they are most commonly minted and traded on the Ethereum blockchain.

We don’t need to get into the technical jargon regarding Ethereum’s coding structure. I’m a marketer, not a blockchain engineer.

But ultimately Ethereum is coded in a way where you can create smart contracts that set rules for all future transactions related to the digital asset.

In their essence, smart contracts help create secure relationships over the internet. Smart contracts are similar to ordinary contracts – but the main difference is they are entirely digital, which means the contract is self-executing, trackable, and irreversible.

Smart contracts also help to eliminate 3rd parties in contracts. Fewer middlemen equals faster execution and more money for the creator.

And it should be noted, you can get very creative with smart contracts. I’ve seen NFTs that automatically destroy themselves after they exceed too many sales. Why you would want to implement that in your smart contract, I have no idea, but with smart contracts, anything is possible.

Let’s take a look at some real-life smart contract examples in a few different industries.

Example #1 – Nas

*Nas gave his fans ownership of streaming rights to his music*

Nas is an award-winning and critically acclaimed American Hip Hop artist. In January of 2022, he sold a portion of the rights to two of his songs – ‘Ultra Black’ and ‘Rare’ – as NFTs on Royal. Royal is a blockchain-based music investment platform that is looking to change the way music is distributed and owned, as well as how artists get paid.

For the drop, Nas split ownership of these two songs in half. Nas kept 50% ownership of both songs, and he sold the other 50% to the owners of the 1,870 NFTs that were minted.

The NFTs varied in price, costing anywhere from $50 USD to $10,000 USD. The more you spent, the larger percentage of ownership of the song you had – ownership percentages range from .01% to 1.5%.

And here’s the amazing part – because of the smart contract, owners of this NFT will collect royalties anytime these songs are streamed. AND, certain NFTs in the collection give owners up to 21% earned royalties for every single resell.

The NFT collection sold out in less than 5 seconds. Nas made millions of dollars worth of ETH, and his fans now own a digital asset that not only expresses who they are, but that can also greatly appreciate in value, and give them royalties of their own.

Example #2 – Justin Aversano

A photograph from the 'Twin Flame' NFT collection by Justin Aversano — *A photograph from the ‘Twin Flame’ NFT collection by Justin Aversano*

Justin Aversano is a portrait photographer. He was trying to sell physical prints of his photographs, but someone recommended he look into selling them as NFTs.

So he transferred his photographs to the digital world and minted his ‘Twin Flames’ collection as an NFT.

The 100 NFTs in the collections sold out in 5 months, netting Aversano over $130,000 USD in sales.

Not bad eh?

Well here’s where it gets more interesting…

Even though the collection completely sold out, his revenue has grown tenfold.

How is it still growing?

Because of the smart contract.

In it, Aversano made sure that he received a 10% royalty every single time his NFTs were resold.

Well, since then, Aversano’s collection blew up, and has a resell volume of over 12 million USD on OpenSea, netting him an additional 1.2 million USD in royalty sales.

Example #3 – VeeFriends

Entrepreneur, investor, and one of the biggest influencers in social media, Gary Vaynerchuk launched his NFT project VeeFriends in April of 2021.

And while Vaynerchuk is a bit of a controversial figure, there’s no denying that his collection truly raised the NFT-bar.

Not only does every NFT owner get their digital asset, but they also get access to VeeCon in 2022, 2023, and 2024. VeeCon is an annual business and marketing conference that is ONLY available to owners of a VeeFriends NFT. This year, the conference has an impressive list of speakers including Snoop Dogg, Charli D’Amelio, Beeple, Logan Paul, and more.

Let’s talk money.

There were 10,250 NFTs in the collection, and it sold out in a few days, which generated over 51 million USD in revenue.

Vaynerchuk also implemented a 10% royalty in his smart contract for any resells on OpenSea. Vaynerchuk claims that this has generated him an additional 40 million USD in revenue.

Final thoughts on smart contracts and royalties with NFTs

While royalties and contracts exist outside of the digital world, they don’t function with the same efficiency as smart contracts.

Smart contracts are changing the way we look at digital assets, ownership, and royalties as a whole. They are not only empowering artists, creators, and businesses, but they are also giving fans and customers the ability to have ownership over digital assets that can appreciate in value.

It’s all really game-changing stuff! And while NFTs are only in their infancy, the future looks bright for the world of digital assets minted on the blockchain.

If you are considering starting your own NFT project and want to take it to the moon, be sure to reach out to one of our Digital Strategists. We’ll put together a next-level marketing plan that explodes awareness and sales of your unique collection.

Disclaimer – this article is meant to educate and entertain, but it is not financial advice. Please always be sure to do your own research.

NFTs EXPLAINED: WHAT THEY ARE AND THEIR USE IN DIGITAL MARKETING

Posted on February 15, 2022December 7, 2022 by Aaron Radcliffe

Even if you don’t know what they are, it’s likely that you’ve at least heard the term “NFT” being mentioned online over the past year. “Non-Fungible Tokens,” as they’re called, are unique representations of items – either real or completely digital – that exist on blockchain systems like Ethereum.

These NFTs can come in many forms, such as photos, games, music, and just about anything else. They are also finding their way into digital marketing, and having an NFT marketing strategy is an emerging trend.

Many NFT co-founders are looking into using an SEO agency for NFT visibility on search. When marketing NFTs SEO could be your golden goose.

Due to their digital structure, every NFT is completely one of a kind, meaning they aren’t exchangeable with one another.

Think of it this way:

If two people each have a $100, they can trade with one another, and neither person loses any value – seeing as how each banknote is worth exactly the same amount.

However, an NFT is a bit different because each one is unique. This means none of them are the same value.

Trading NFTs is a bit like exchanging some baseball cards for someone else’s skateboard. This is where the “non-fungible” part of the name comes from, which means “non-interchangeable.”

When you start your NFT project, all of your NFTs will be unique and one of a kind.

What gives an NFT value?
How can NFTs be used for digital marketing?
NFTs’ Potential
Increase Your Brand Awareness with Innovative Digital Marketing Solutions
What else can you do to get your NFT off the ground?

What gives an NFT value?

With how strange NFTs may seem, there are a few key things that give them value, such as:

1. Being Unique

If you have an NFT, then you have the only one like that. It is impossible to make the exact same one with identical codes or token numbers. This is constantly backed up and verified by the blockchain ecosystem NFTs are a part of.

2. Scarcity

Because of those previous qualities, each NFT is a scarce commodity. Any artist or creator generally only has, at most, a few NFTs. As such, it’s a safe assumption to make that if you happen to own one, you’re one of the only people to be in possession of such an item.

3. Collectable

There aren’t very many ways to saturate the NFT market, so buying them with the goal to resell them, then holding onto them until their value goes up is a legitimate strategy. There are actually quite a few people today taking advantage of this and making a decent amount of money to live off of.

4. Immutable

Because NFTs exist on the blockchain, they also carry with them the same properties of everything else on that blockchain. Mainly being: they are immutable; their metadata, images, names, or anything else related to it can never be changed, revised, or removed.

5. Everlasting

While it may sound a bit hokey and faddish, due to the fundamental technology, once a Non Fungible Token exists it will never not exist. The data will always be there because the blockchain is an eternal construct. It’s almost like buying a hunk of gold that can never be destroyed, disappear, or be stolen. It’s yours forever.

6. Can be Resold

However, just because you’ve got it forever doesn’t mean you can’t choose to resell it. And, because of their highly volatile nature, you can even make some ludicrous amounts of money doing so. Some have even sold for well over $20,000!

How can NFTs be used for digital marketing?

Telling the story of your brand and interacting with your customers are two of the biggest factors in growing any business.

And even before Non Fungible Tokens existed, there were many ways to accomplish those two things.

However, with NFTs continuing to become more and more relevant, they offer incredible new opportunities to give customers brand experiences like never before. You need to give this a try if you have not done so yet.

Of course, don’t give up whatever you’re already doing – especially if it’s working – in lieu of NFTs.

Instead, consider how including these trendy new concepts in your overall marketing strategy can help build hype around your products and services.

Look at Taco Bell’s recent campaign centered around 25 NFTs. It was a great NFT marketing strategy.

Their goal was to support their charity that helps young individuals advance their careers and education by selling these NFTs, and they all got snatched up in less than 30 minutes! As you can see, Non Fungible Tokens can create an insane buzz around your brand when done effectively.

NFT marketing strategies like this are great for building brand awareness.

We recommend creating a narrative about your NFT project. The narrative can exist on your website, social channels, and more.

You can then do SEO yourself or employ an SEO agency for your NFT project to gain more visibility of your project. We believe the best way to get your NFT marketing strategy off the ground is with SEO.

Here are some other examples of how brands have successfully incorporated NFTs into their marketing (you can create the same!):

Advertisements being converted into NFTs, then sold to customers
Up-and-coming products or services being supported by NFTs
Social media competitions where engagement is rewarded via NFT prizes

NFTs’ Potential

There really is no limit to how you can use NFTs to further your brand and business. The only limit is your own creativity!

Speak with your colleagues about these concepts, and try to think of some innovative ways you can use them to interact with your audience and build a new NFT marketing solution for your business.

Increase Your Brand Awareness with Innovative Digital Marketing Solutions

First Page is Hong Kong’s leading digital marketing agency, and we are constantly devoted to creative new, and innovative marketing solutions.

We offer SEO solutions since we are an SEO agency for NFT projects and also produce white papers.

Make sure to contact us today so we can discuss how we can help you leverage new concepts to grow your business!

Get in touch

What else can you do to get your NFT off the ground?

Want to make more sales and profits from your NFT? Here are some useful marketing tactic blogs that can help:

Are you a busy entrepreneur in the NFT space? You may not have the time to run the marketing tactics you need to make money regularly. If this is the case, we encourage you to review some of our strategic marketing services to drive more revenues from your NFT project:

SEO for your business to drive qualified leads
Social media management for improved brand awareness
Linkbuilding to drive organic traffic to your website
Top converting landing pages to convert your leads
Email marketing campaigns to bring in referrals

What’s all the fuss with NFTs and Why Now is the Time to Invest in Them

Posted on December 1, 2021 by Bimal Mirwani

Unless you’ve been cast away on a desert island where talking to a volleyball is your best chance of an engaging conversation, you’ve probably heard of NFTs.

It’s unavoidable. Anyone remotely interested in investing has been talking about it, and if you’re still not quite sure what it is, now’s the time to do your homework.

NFT is an abbreviation for Non-Fungible Token, a new form of digital asset that can represent virtually anything from a piece of digital art to a real-life car or apartment. Every token on the online marketplace represents something of value through a unique identifying code that can not be forged, copied, or counterfeited.

By introducing scarcity to the equation, NFTs completely revolutionized the world’s understanding of digital ownership. Unlike previous digital items that can be easily duplicated and copied, NFT users can now buy a digital item and be able to claim sole ownership of it.

How do NFTs even work?
Who’s using NFTs?
Where do You Buy and Sell NFTs?
How do I create an NFT?
Benefits of Investing in NFTs
The Drawbacks of NFTs
Talk to Our Experts

How do NFTs even work?

If NFTs represent a digital item, then they are just like a file on my computer, right? Not exactly. The biggest difference between NFTs and traditional digital assets is that they exist on something called a blockchain – a public ledger that stores information and data through a worldwide network of servers and computers.

This is the same kind of public ledger famously used to record Bitcoin and other cryptocurrency transactions. Any data or information that enters the ledger is recorded by a gigantic network of users who work together to maintain and verify the record and protect it from being altered or reversed.

The significance of this innovation is that buyers and sellers can now confirm with absolute certainty that the digital asset in the transaction is indeed the original item. Blockchain technology allows NFT users to instantly identify ownership and certify the authenticity of an item without any third parties involved.

Who’s using NFTs?

Like we’ve mentioned before, NFTs can represent anything from a piece of digital art to a car in real life. While NFT’s usage continues to expand into every type of commodity, certain industries have felt the impact of its infiltration far more significantly than the others.

Art Industry

Artists and musicians are often the first to capitalize on new trends, and they have done so perfectly with this one. NFT artwork is already being sold at Christie’s auction house and at astronomical prices.

In March 2021, American digital artist Beeple’s NFT artwork named Everydays: ‘The First 5000 Days’ sold for USD $69 million and instantly placed him as one of the world’s top-earning artists.

Since then, celebrated musicians and filmmakers have all begun minting exclusive material as NFT merchandises to attract the interest of loyal fans and collectors, such as when unseen footage from Wong Kar Wai’s In The Mood for Love was sold as an NFT for USD $550,000 in the Sotheby’s auction. Without NFTs, these memorabilia might have never reached the market, let alone the fans.

Real Estate and Property

As we’ve previously mentioned, NFT’s use of blockchain as a public ledger gives it a powerful advantage in verifying transactions. During the purchase of a property, buyers and sellers can both verify the chain of ownership with absolute certainty and relative ease.

This kind of transaction also removes the need for a middle person or a third party organization such as banks and lawyers and the tremendous amount of processing time, fees, and paperwork associated with them.

While property transfers through NFTs are still relatively infrequent, some enthusiasts have already begun buying and selling their apartments with it due to the benefits mentioned above. As NFTs become more and more popular, don’t be surprised to see a lot more NFT transfers in the housing market in the near future.

Fashion Industry

It should be no surprise to anyone that the fashion industry has found NFTs to be extremely advantageous. For decades, luxury brands and their customers have always struggled to deal with counterfeits, and the invention of NFTs could provide a much-needed solution.

The use of NFT technology can help verify ownership of an item and certify the authenticity of a product. The implementation of NFTs means consumers can buy an item with absolute certainty of its authenticity and save a ton of time and money from not having to navigate into counterfeit products constantly.

Like in the art industry, the popularity of NFTs has driven brands to release new lines of products that would generate millions of dollars in sales and revenue. Virtual sneaker brand RTFKT released a series of limited-edition sneakers that you can try on and purchase on Snapchat before redeeming the physical version. The result? Over 600 pairs of sneakers sold, amounting to USD $3.1 million in sales.

Where do You Buy and Sell NFTs?

If you’re looking to take your first step, check out our list of popular and reliable marketplaces that are ideal for your first purchase. They are all simple to use and can be accessed even without in-depth knowledge of cryptocurrency and blockchain technology.

OpenSea

Transacting on the Ethereum blockchain, OpenSea allows users to buy and sell all sorts of NFTs without any blockchain fees. It is one of the most popular NFT marketplaces on the planet and offers a wide range of digital assets for users to trade, such as digital art, music, domain names, and virtual world souvenirs.

Creators can also use OpenSea to mint their own NFT and start selling without having to code anything. They currently charge a 2.5% commission on every sale, but it is still a great place to start with for anyone who wants to sell their digital creations.

OpenSea.io

Rarible

Similar to OpenSea, Rarible is Ethereum-based and works as both an NFT marketplace and a minting platform. One special feature that Rarible offers is the ability for creators to configure smart contracts. This is very useful for the collection of royalties on their creative work in the future.

Rarible also has a unique function where you can encrypt additional content, such as high-resolution files and hidden messages into your token. Together, these fun and innovative functions have made Rarible a very popular platform amongst creators and collectors.

Rarible.com

SuperRare

While the platforms mentioned above are both very accessible platforms for new creators, SuperRare operates in a more exclusive fashion. You can only become a seller on this platform through invitation, and the commission on each sale is a whopping 15%. This exclusionary approach has helped the platform maintain very high standards for its artwork and, in turn, establish a reputation of being more luxurious and premium than its competitors.

If you have a large amount of capital to invest, SuperRare will be a very reliable auction house. Since launching in 2018, the platform has reportedly generated over USD $110 million for its creators, USD $65 million worth of secondary sales, and an average resale value of over 5000% for their artwork.

SuperRare.com

How do I create an NFT?

If you are a digital artist or creator who wants to mint your own NFT, platforms such as Rarible and OpenSea will allow you to jump straight in without having to code anything or have extensive knowledge of blockchain technology.

All you need to get started is a crypto wallet to complete your transactions, which is also very easy to set up nowadays as Coinbase, Gemini, and other popular web and mobile wallets are now available for Hong Kong citizens.

Once you enter the create page of your platform, you can simply upload your artwork in one of the available file formats (JPG, GIF, PNG, MP4, WAV are the most common), pen your own title and description, and add them into a collection. Some platforms, such as Rarible will also have additional options such as adding hidden and unlockable content to your artwork.

While most NFTs are currently minted on Ethereum, you can also choose to mint on other blockchains such as Tezos and Flow. These blockchains are less popular but provide benefits such as being more eco-friendly and having lower transaction costs.

Benefits of Investing in NFTs

Despite being relatively new, NFTs have already become a significant holding in many investors’ portfolios. Here are the reasons:

Great Place to Diversify

With the market constantly making new highs, it’s always a good idea to diversify your investments. If high growth potential sounds appealing to you, cryptocurrency and NFTs might just be your best bets.

Like the crypto market, prices for NFTs could be quite volatile compared to traditional large-cap stocks, but provide a much bigger return when they do go up.

Many investors now believe that cryptocurrency is staying for the long term and that blockchain technology is shaping our future. If you share similar views regarding the potential of blockchain, NFTs are an unmissable investment.

Digital Assets are The Future

Whether you are a collector of watches, designer clothing, vinyl records, or classic art, your collection is bound to increase in value over time.

This is the same for digital assets, as scarcity and rarity are important factors in helping some NFTs rise to their current prices.

More and more artists are jumping on the bandwagon, and their fans are also driving up demand for exclusive artwork. This trend is quickly spreading to other industries, as sports stars are beginning to mint their own souvenirs and sell them at great prices.

Basketball fans can now own an iconic moment of history through collecting NFTs of NBA highlights. An NFT containing a Lebron James highlight was sold for a mind-staggering USD $200,000, and that number could still go up over time.

Get a Head Start on Technological Innovation

If the history of crypto prices has taught us any lessons, it’s that new technology can change our entire economy within just a few years. As blockchain technology and cryptocurrency continue to mature and have more impact on our future, getting into the game early will give you a significant advantage.

The use of cryptocurrency continues to expand, and many experts believe that we could be using it for daily transactions in the near future. By getting into NFTs early, you will learn the ins and outs of the new technology and the community that it created and discover new business opportunities and smarter ways to make investments.

Connect with The Creators

Apart from surging a new wave of artwork and memorabilia through creating a huge and highly lucrative market, NFTs also open the door for artists and fans to connect in ways that were not possible in the past.

With blockchain technology as its backbone, NFT digital artwork can be sold to and owned by one single proprietor, and transactions can take place without any mediator or middle person involved (other than a small fee charged by the NFT platform).

This means you can now buy a unique piece of art from your favorite artist and musician, and the funds will be transferred directly to them. Their revenue will no longer be hampered by things such as piracy and commissions.

The Drawbacks of NFTs

Like any other newly popularised technology, NFTs also comes with a few drawbacks. As a potential investor, you might want to know some of the things that might hinder its progression and be prepared for the risks involved.

Highly Speculative Nature

While it’s true that any investment will come with its own set of risks, NFTs are significantly riskier than most of your other options as there are still many unknowns regarding their long-term viability and value.

NFTs that are extremely rare and possess sentimental value (such as exclusive, unseen cuts from a very popular movie) will undoubtedly preserve or even gain value over time, as we have seen with physical antiques such as trading cards and signed CDs and records.

However, other NFTs that are less likely to generate worth from emotion and history might not age so well. Like any tangible art collection, factors such as supply and demand will determine an item’s price, and it’s hard to predict what a less desirable NFT item will be worth after the market cools down and demand decreases.

Environmental Problems

Like cryptocurrencies, NFT uses blockchain to record transactions, and this requires high processing power from many servers and computers across the world.

The upsurge of crypto mining has already created a GPU and semiconductor shortage. With climate change on the horizon, people are becoming more concerned about the environmental problems NFTs could cause.

Fortunately, many blockchains are looking to improve their efficiency.

Ethereum is aiming to cut its energy use by 99% by the end of 2022. Similar measures will have a significant impact on NFT’s longevity.

Decentralization and Control Issues

NFT operates on blockchain and relies on a highly decentralized and anonymous network for verification. The technology is constantly improving, but there is still room for security breaches and foul play.

As such, there had already been complaints from artists that their work had been minted for profit without their knowledge or consent.

While platforms such as OpenSea and Rarible continue to invent new solutions in preventing copyright infringement and plagiarism, buyers still need to be cautious of the risks involved as they could be losing a large amount of money on their investment.

Talk to Our Experts

If you’re ready to start investing in NFTs and want to kick start it with something special, check out the Superist NFT collection and add a piece of digital marketing history to your collection.

Have questions about NFTs or how the changing digital landscape will impact your business? Don’t hesitate to reach out and speak to one of our digital specialists.

With years of experience planning thousands of successful campaigns for clients across the globe, our talented team of experts at First Page will help you develop an impactful digital marketing campaign that will captivate your customers.

Get in touch to learn how we’ll help your brand and business stay on top of an increasingly digital economy.